Worldwide, wetlands are subjected to increasing anthropogenic pressures resulting in loss of their hydrological and ecological functions. Such impacts are more pronounced in the case of wetlands in urban areas which are exposed to land use changes and increased economic activities. In many Indian cities, natural water bodies such as lakes are heavily polluted due to runoff from farmlands in urban and peri-urban areas and discharge of untreated domestic and industrial wastewater. The major constraint for restoring such water bodies is difficulty in devising a concrete action plan for analysing different sets of water quality parameters. Hence, a water quality index (WQI), which is a tool to analyse large amounts of data on different water quality parameters, is computed for one of the biggest natural lakes in the metropolitan city of Delhi. The mean WQI of the lake was estimated to be 46.27, which indicates a high level of water pollution. The paper discusses how these findings can be used for informing policies on management of wetlands. The paper also suggests establishment of a community based water quality monitoring and surveillance system, backed by infrastructural support from the State, in order to restore the wetlands in urban areas.